Expansion in Saudi Arabia’s non-oil private sector was driven by robust demand and the acquisition of new clients, resulting in softer cost pressures.
The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) for March was slightly lower at 57.0 compared to 57.2 in February, yet it remained significantly above the threshold of 50.0, indicating a growth in sector activity.
March witnessed the highest increase in output levels in six months. This uptick was largely attributed to vigorous new orders and healthy demand conditions by the majority of businesses surveyed.
‘The positive momentum also prompted accelerated purchasing activities and additional hiring, underscoring a buoyant market outlook,’ commented Naif Al-Ghaith, Chief Economist at Riyad Bank.
New business orders saw a sharp increase for the second consecutive month in March, with many firms reporting a rise in business volumes.
Improved demand from international clients was also noted, marking the first consistent month-over-month growth since mid-2023, according to the report.
With an optimistic perspective on future demand, companies have been increasing their workforce to manage the growing workloads, resulting in a moderate rise in employment.
‘The surge in orders and customer acquisition not only bolstered current operations but also laid the foundation for continued expansion and potential business growth in the foreseeable future,’ Al-Ghaith asserted.
For the second successive month, the non-oil private sector firms experienced a decline in the rate of cost inflation. Despite a general increase in input prices, inflation rose at its slowest pace in eight months, primarily due to easing wage pressures.